Despite the problems and challenges facing large law firms, making partner at a Biglaw firm remains a big deal. As an old friend told me a few years ago, comparing his pre- and post-partnership existences, “My life has been transformed. I feel like I’ve been let into a special club. Overnight, the same people treat me in completely different ways.”

My friend isn’t the only partner who feels like he got kissed by a princess and turned from a frog into a prince. Others recognize the transformative power of making partner as well. In the words of our very own Anonymous Partner, “You now occupy a new professional status, and the nature of making partner is such that no matter how badly you screw up the rest of your life, you have accomplished something very rare. It is a life milestone, on par with getting married or winning the lottery in terms of its immediate alteration of your identity.”

Comparing making partner to winning the lottery is apt: many lottery winners don’t live happily ever after (as brilliantly captured by this Onion article, Powerball Winners Already Divorced, Bankrupt). A fascinating new piece in The New Republic goes behind the scenes at one major law firm and shows that being a Biglaw partner in the twenty-first century isn’t all peaches and cream. In fact, aspects of being a partner sound as appealing as rotten fruit (and this isn’t just sour grapes)….

Of all the occupational golden ages to come and go in the twentieth century — for doctors, journalists, ad-men, autoworkers — none lasted longer, felt cushier, and was all in all more golden than the reign of the law partner.

There was the generous salary, the esteem of one’s neighbors, work that was more intellectual than purely commercial. Since clients of white-shoe firms typically knocked on their doors and stayed put for decades — one lawyer told me his ex-firm had a committee to decide which clients to accept — the partner rarely had to hustle for business. He could focus his energy on the legal pursuits that excited his analytical mind.

Above all, there was stability. The firms practiced a benevolent paternalism. They paid for partners to join lunch and dinner clubs and loaned them money to buy houses. When a lawyer had a drinking problem, the firm sent him off for treatment at its own expense. Layoffs were unheard of.

We all know how those days are gone. Regular readers of Above the Law are familiar with how the formerly protected world of partners has been rocked by layoffs, de-equitizations, and dissolutions of entire firms in recent years.

Scheiber goes on to describe familiar changes in the world of Biglaw, correctly identifying the critical problem as “many, many more high-priced lawyers today than there is high-priced legal work.” There will always be some top-of-the-line legal work to sustain top-of-the-line firms, but probably not enough to sustain all the firms who are today viewed as part of “Biglaw” — the NLJ 250, say, or the Am Law 100. As Scheiber puts it:

Within the next decade or so, according to one common hypothesis, there will be at most 20 to 25 firms that can operate this way — the firms whose clients have so many billions of dollars riding on their legal work that they can truly spend without limit. The other 200 firms will have to reinvent themselves or disappear.

The New Republic piece zeroes in on one such firm that will have to retool itself or suffer the consequences: Mayer Brown, “the paradigmatic Chicago firm.” He uses “Chicago firm” here as a term of art, contrasting the “Chicago firm” with the true “Cravath model” firm; the Cravath-style firm is more profitable, cutthroat, and leveraged than the Chicago-style firm, in Scheiber’s telling.

Scheiber provides a juicy mini-history of Mayer Brown over the past few decades. He describes how it overcame the 1984 collapse of Continental Illinois Bank, a major client, as well as Mayer’s ill-fated merger with the London firm of Rowe and Maw in 2002. He then focuses on the changes that took place at Mayer Brown under “the ambitious head of the firm’s London office,” Paul Maher, whom some nicknamed the “Dark Sith Lord” of the firm:

In 2007, the firm’s management committee stripped more than 10 percent of these brief-writers of their equity stake — 45 total — only weeks before Mayer Brown held its annual partners meeting in London.6 The timing was unfortunate. Many partners had already reserved plane tickets for their spouses at their own expense. “They were all ready to go when the pink slips came out,” recalls a partner with a close friend who was affected. “One of the guys let go had that day booked a flight for his wife.”

The partners who made the trip were unsettled by its poshness. Mayer Brown had rented out the Grosvenor House hotel, one of the most expensive in London, and booked top billers into cavernous suites overlooking Hyde Park. One evening, the firm chartered boats to take partners down the Thames for dinner at the Royal Observatory in Greenwich. When they arrived, they were escorted down a canvas carpet by guides carrying torches and dressed like beefeaters. The speaker for the evening was the future British foreign secretary, William Hague.

Schieber traces much of the cultural shift at Mayer Brown over the years to changes in partner compensation:

For decades prior to the 1980s, Mayer Brown tilted in the lockstep direction. But, after the collapse of Continental, [then-chairman] Bob Helman realized the firm would go under if his partners sat around waiting for business to walk in the door. Hereafter, he decreed, each partner’s compensation would depend heavily on the amount of business he or she drummed up.

Helman’s plan may have worked too well. Ever since it went into effect, partners have competed aggressively not just against lawyers at other firms, but against one another. Chicago partners would fly into New York to poach clients from their Manhattanite counterparts, holding clandestine meetings in which they would pitch themselves as less expensive and a mere two-hour plane ride away. When the New Yorkers invariably caught wind of these plots, they would remind clients that they were far more efficient than their Midwestern cousins.

Scheiber then delves into detailed discussion of the partnership points system at Mayer Brown. You should check out the full piece to read it for yourself; it’s extremely interesting for observers of Biglaw. Here’s the gist: before 2007, “there were often 75 or 100 different levels of income” among the partners; after 2007, the firm moved to a system of about 15 bands, where partners in the same band would receive the same number of points, with each point worth a specific amount depending on the firm’s financial performance that year.

This new system, which might sound logical in theory, presented a number of problems in practice. Disputes arose over who should move up a band and on what basis. Controversies broke out regarding manipulation of business-development credits. And, even more problematically, points started falling in value in 2009 and 2010 — not just because of the financial crisis, which affected the firm’s performance, but because of bonuses being diverted to certain partners, totally independent of their points allocation. Some of these bonuses amounted to hundreds of thousands of dollars.

It sounds like partner compensation remains a sore spot for some at Mayer Brown. The New Republic piece describes, in great and painful detail, all of the infighting over distribution of partner profits — infighting that associates and staff are blissfully ignorant of, which is at least one way in which partners have it worse. And if the Biglaw pie shrinks over the years to come, as many predict it will, the tension and strife will only grow.

What lessons can be derived from the Mayer Brown situation? Here are a few preliminary thoughts that occurred to me:

If a firm can’t do lockstep comp, then perhaps it should adopt the Jones Day “black box” model, i.e., a closed compensation system, where the powers-that-be set individual partner pay, and no partner knows how much any other partner makes.

If you’re a partner at a “black box” firm, don’t even try to find out what your fellow partners make; just think about how happy you are with your own paycheck, and save yourself the stress.

And live well within your means, since job security for partners isn’t what it once was.

So back to the original question: is being a partner the worst job in Biglaw? There’s a case to be made here. Sure, partners enjoy tremendous pay and prestige. But partners also experience incredible stress and pressure, related both to business development and office politics; they can no longer just focus on doing good legal work, as associates arguably can. At the same time, partners no longer enjoy the job security they once did. And when firms fail, like Dewey & LeBoeuf, partners face financial exposure in a way that associates and staff do not.

This is just a thumbnail sketch of the New Republic article, which you should check out for yourself. It contains many amazing (and depressing) anecdotes not mentioned here, such as the story of a laid-off Mayer Brown associate who now makes $40,000 a year, which is not enough to support her family, and might have to declare bankruptcy.

I thought Noam Scheiber’s piece was great, but reasonable minds can disagree. Here’s what one former Mayer Brown partner had to say about it….

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